Why AgustaWestland chopper scam cover-up is like Bofors

In the summer of 1987, when the Bofors scandal broke, Arun Singh, then the minister of state for defence in the Rajiv Gandhi government and a fellow Doon School-mate of Rajiv’s, suggested that there was an easy way to get Bofors to reveal whether it had paid bribes to win the Indian contract.

India, he said, should exercise its "commercial clout" over Bofors – and threaten it with cancellation of the contract if it refused to cooperate with the Indian government and assist in the investigations to determine if it had indeed paid middlemen—which was expressly forbidden—to bag the order.

At the first stage, Arun Singh suggested, the Indian government should summon the Bofors chief executive to India and demand an explanation over allegations that had first surfaced in Swedish radio revelations – that the company had paid commissions to close associates of Rajiv Gandhi to secure the contract.

Defence Minister AK Antony. Image courtesy PIB

Arun Singh evidently thought he was acting in the best interests of the country – and of his friend Rajiv Gandhi, whom he suspected had had his name smeared without any basis. But the manner in which virtually key cabinet ministers ganged up against him to shoot down his suggestion and virtually boarded him out led him to believe that some mischief was afoot.

Arun Singh immediately resigned from the Rajiv Gandhi administration in very strained circumstances: his last meeting with Rajiv Gandhi, he recalls here, was characterised by "bitterness". He then retreated to the hills, opting out of a career in government, but the bitterness between the two families and in the Congress lingered long after. In 1999, when the then defence minister Jaswant Singh appointed Arun Singh as his advisor citing the latter’s expertise on defence and strategic issues, the Congress criticised the appointment. Obviously the old wounds—of a time when Arun Singh wanted to turn the screws on Bofors without realising that Rajiv Gandhi’s own associates stood implicated—hadn’t healed.

What we are seeing today, in the wake of allegations of bribery paid in the AgustaWestland helicopter deal, is a re-run of the Bofors cover-up. Defence Minister AK Antony, under immense pressure after revelations that bribes were paid to win the deal, said last week that the government would cancel the contract if it was established that bribes had indeed been paid in violation of the "integrity pact" that the company had signed.

There is, of course, no credible proof of wrongdoing yet. As of now, there is only a prima facie case based on confessions from the suspected middlemen in the deal, which are being contested by both the company and the alleged recipients of the payoffs: the Tyagi brothers, who are cousins of the former Air Chief SP Tyagi. The trial in the case is under way in Italy,

And as Col Ajai Shukla points out (here), cancelling a contract in the absence of evidence that the contract terms were violated would only invite litigation by Finmeccanica, the parent company of AgustaWestland.

Shukla writes: "If this were the United States, where the defence department has the financial clout to ensure that companies like BAE Systems have paid $400 million fines for apparent bribery, Agusta Westland and Finmeccanica might have quietly fallen in line in the interests of future business." But India’s defence ministry, he reckons, does not have the weight to unilaterally cancel such a large contract - even though Finmeccanica subsidiaries do substantial business with India’s "import-loving military".

Yet, when the government signals, as it has been doing since Monday, that it opposes Antony’s move to shake Finmeccanica to reveal the details of alleged bribes paid, it effectively surrenders its 'commercial clout' at the first stage itself, and leaves room for the suspicion that it is working in tandem with the company to cover up any wrongdoing there may have been.

Worse, External Affairs Minister Salman Khurshid trots out a red herring when he suggests, as he does here, that cancellation of the AgustaWestland contract would amount to an "overreaction" and would "affect our defence preparedness".

The fact of it is that of all the armament systems purchases that the Indian military has made in recent times, the Agusta Westland helicopters have perhaps the least to do with our core defence requirement. The choppers are intended to ferry VVIPs, which facility is frequently abused by the executive and the political establishment – as for instance, when Rahul Gandhi (who holds no government position) wanted to fly to Assam on party work and sought the services of an IAF vehicle. (That request was turned down, but only because of inclement weather: details here.)

So when Khurshid suggests that India’s defence preparedness would be compromised by even holding out the threat of cancellation of the contract to purchased overpriced helicopters for VVIP duty, it is a false alarm, which compromises India’s stand at the first stage itself.

Additionally, Khurshid cites certifications from service chiefs to claim that the "quality of the product is beyond compare. Nobody has raised a question on the quality of the aircraft". That’s precisely the point, Mr Khurshid: Nobody has raised a question on the quality of the aircraft: the questions, if any, relate only to the allegations of bribery. As British Prime Minister David Cameron said (here), there is a need to separate the question of the quality of the helicopter from the scandal surrounding the allegations of bribes.

But Khurshid conflates the two issues by citing the quality of the helicopter when responding to allegations of bribery.

As Firstpost has noted earlier (here), all the smoke signals indicate that the UPA government isn't overly industrious about getting to the truth of the matter – and is in fact working to sabotage the probe. The CBI hasn’t so far even registered a case, which is why Interpol, from whom it sought help, said it couldn’t. Italian courts too have not been keen to hand over the evidence that investigators have meticulously pieced together for fear of compromising the trial in Italy.

There is a political twist to the controversy as well. As happened with Arun Singh in the Bofors case, when the Congress wanted to pre-empt his effort to cancel the contract with Bofors, there appears to be an ongoing attempt to paint Antony as something of a lone warrior fighting to salvage his reputation with the threat to cancel the contract with AgustaWestland.

This report claims: "Significantly, Antony had so far been seen as acting on his own, and had chosen not to run his decisions past either the CCS or the Prime Minister's Office (PMO)."

That sounds ominously like a warning for Antony. Things didn’t work out too well for Arun Singh when he sought to exercise India’s commercial clout to cancel the contract, and in many ways Arun Singh is a far more honourable man than Antony.

Perhaps 'St Antony' should watch his back. But then, he's a consummate politician, unlike Arun Singh, and in many ways a more artful survivor. So perhaps he'll outlive this one too.